Richard Bentall, a clinical psychologist, is a controversial figure in the field of mental health. An example of the hostility that his conclusions provoke among those practising conventional (that is, drug-based) psychiatry is given in the preface to this book, which raises serious questions about the treatment of mental illness. Bentall describes an encounter with an amiable-seeming psychiatrist who responds to a talk he has given as follows: "Professor Bentall has told us he is a scientist. But he is not! Nothing that Professor Bentall has said - not one single word - is true."

The unlikelihood of a professor of psychology delivering, in the sober environment of an NHS conference, a talk in which every word is fictitious and every opinion fallacious gives a flavour of the threat that Bentall's theories pose. The response, as reported, sounds deranged and it is interesting to observe how debate among professionals over the causes of mental illness appears to induce its own version of madness, as if the topic itself were contagious. One sign of sanity, both in the individual and society, is the ability to deal with dissent.

In an earlier book, Madness Explained, Bentall was at pains to distinguish his approach from other anti-psychiatrists - for example, RD Laing, whose radical views were discredited because of his flamboyant lack of rigour and attendant inability to accept criticism. Bentall, as this book attests, is a different kettle of fish. With patient persistence and without recourse to rancorous diatribes, he has appraised the scientific evidence for the success of contemporary psychiatric treatments and come up with a dismal report. It is probably the very balance of his approach that drives his opponents crazy.

Doctoring the Mind is an attempt to clarify the dense array of evidence offered in Bentall's earlier work. The result is a much easier read. It is also, for that reason, more disturbing. Other recent books (Lisa Appignanesi's Mad, Bad and Sad, for example) have also traced the dark strains of misperception, mismanagement and downright cruelty in psychiatry's chequered history, but Bentall's achievement is to focus on contemporary psychiatric practices, especially those dedicated to treating serious psychoses (his own area of expertise).

Bentall's thesis is that, for all the apparent advances in understanding psychiatric disorders, psychiatric treatment has done little to improve human welfare, because the scientific research which has led to the favouring of mind-altering drugs is, as he puts it, "fatally flawed". He cites some startling evidence from the World Health Organisation that suggests patients suffering psychotic episodes in developing countries recover "better" than those from the industrialised world and the aim of the book is broadly to suggest why this might be so.

The first part describes the historical evolution of different kinds of treatment, moving on to dismantle some myths about the nature of severe mental illness. On the way, Bentall addresses the problem of diagnostic categories, suggesting that what are conventionally called psychiatric "symptoms" are more accurately termed "complaints". A particular focus of his critique is the notion of heritability, the theory that mental illness has a genetic basis. According to Bentall, there exist grave flaws in the research methods adopted and the stigma of an inescapable genetic stamp baselessly fuels discrimination against those suffering mental disarray. In addition, the dangers of long-term exposure to many psychotropic drugs appears to outweigh their usefulness.

Here it is important to explain something that is not always understood, which is that mental "illness" is not strictly comparable with physical illness. There are several reasons for this, one being that the aetiology (causation) of so-called mental disease is not yet identifiable in the way that, say, measles is. The precise causal relationship between or mind and body remains misty, but that strong emotional states have an impact on physical states is recognisable in everyday life. We do not feel fear because we have paled or experience anxiety because we sweat. We blush or, if we have penises, have erections because strong emotions trigger these normal physical responses.

The question then becomes this: are distressing mental states the result of impaired brain chemistry or is it the other way round? Does trauma, whether singular or chronic, as in the long misery of an abandoned child or the recurring anxiety of an assaulted one, alter the subtle chemistry of the brain to affect subsequent states of mind? This debate, as Bentall demonstrates, is not only still on, but is heated.

The second reason for distinguishing between physical and mental illness is that diagnostic concepts defining "mental disease" are, in Bentall's words, "invented, not discovered". They arise out of a collective decision, rather than scientific discovery (you can't test for schizophrenia in the way you can for diabetes). Schizophrenia and bipolar disease (once called "manic depression") are merely the names given to a loose collection of "symptoms" and the decision to plump for one diagnosis over another will be influenced by the doctor's interpretation of the current psychiatric scoreboard.

Perhaps significantly, psychiatrists in the US and Russia are more likely to diagnose schizophrenia than their warier European colleagues. I was amused to find that, according to one of the quoted tests, I would be labelled psychotic, while no test (at least in my current state of health) could show that I have, for example, TB. In this context, it is relevant that, in the old USSR, dissidents were commonly labelled "schizophrenic". It would have been simpler to be rid of them by calling them "lepers", but leprosy can be disproved through laboratory testing, while schizophrenia cannot. That physical and mental illness are incommensurate is significant, as it has a profound bearing on treatment. While advances in the realm of physical illness have been spectacular, in the shadowy province of mental health the news is at best disappointing.

And some of it is dire. Bentall is not the first to call attention to a drugs industry whose success is based on the efficacy of its marketing techniques rather than of its medications. But it is useful to be reminded of the massive financial forces behind the enthusiasm for drugs. It has become standard practice among psychiatrists to medicate for life those diagnosed with serious psychoses when, demonstrably, more is not better, either in dosage or time scale. In the US, children are being prescribed anti-psychotic drugs for "disruptive" behaviour. Grief, disappointment and old age are nowadays routinely met with serotonin-reuptake inhibitors.

In the course of his inquiry, Bentall is at pains not to fling out the baby with the bath water. He makes an all-important distinction between being "anti-psychiatrist" and "anti-psychiatry", a common category error, and is careful to say that "most people drawn to work in psychiatry are kind and caring". He recognises that there are occasions where drugs are necessary and some when nothing else will do. He is not in favour of half-baked "alternative" remedies.

He believes that it is true that some behavioural disorders are the result of a complex malfunctioning of neural chemistry, and also - not at all the same thing - that states of emotional anguish will have a somatic counterpart that can be eased by medication. In other words, he is open-minded about drug therapy, provided it is not used as a panacea or a substitute for treatments that may produce happier outcomes.

What's to be done? Abandoning his distinctive note of moderation, Bentall finally becomes passionate. The first answer, he suggests, is a greater regard for the role of adverse circumstances in provoking mental illness. If bad things happen to people, this is registered in their bodies' chemistry ("a troubled brain cannot be considered in isolation from the social universe"). The second answer is a concomitant respect for the power of interpersonal relationships to ameliorate these effects. One of the concluding chapters, entitled "The Virtue of Kindness" (the subject of the psychoanalyst Adam Phillips' latest book), asks if psychotherapy can help. The short answer is yes, because a person, unlike a drug, can learn to listen to another's story.

Psychoanalysis was popularly called the talking cure, but a better name is the listening one, because to be listened to properly inspires, or can inspire, hope. As Bentall starkly says: "Without hope, the struggle for survival seems pointless." At a time when dialogue in the presence of other human beings is becoming less and less available, this brave book gives a sense of why this could be disastrous.

• Salley Vickers is a novelist and former psychotherapist. Her latest book, Dancing Backwards, will be published next week by Fourth Estate